Craig Wear, CFP® advises viewers to evaluate how an inherited IRA will affect their own retirement and taxation. He distinguishes between small inherited IRAs (minor impact) and larger accounts that can grow over time and create significant taxable income, recommending these be handled within a broader, comprehensive financial and tax plan so beneficiaries do not unnecessarily leave money to the IRS.
I think you have to consider how that inherited IRA is going to impact your own retirement and your own taxation. It could turn out to cause quite a tax burden if it's a large account. If it's a small inherited ira, kind of a moot point. It's not that great big of a deal. But if it's a larger account and it's large enough that it's going to grow over the next 10 years to become a significant amount of taxable income, then by the time you have to distribute it, then you really need to put this in context of a bigger tax plan that's part of a bigger, comprehensive financial plan, so that the second half of your life, you're able to really capitalize on all the opportunities available to you and not leave anything sitting at the doorstep of the IRS just because you didn't take some initiative to get it done.
